The funds’ ESG approvals also rest on the managers’ rigorous processes. They use the funds’ broader investment remit and flexible structure to include investments where a positive impact is clear. They employ positive screening, evaluating and investing in funds, and in turn firms, that are paying close attention to the impact they make on society and the environment. Any investments which do not meet the required ESG standards are screened out.
Of the four multi-asset funds, three have a minimum Consumer Price Index plus total return target objective, while one has an income target of a net 3.5% per annum. This means that, like the MPS, investors will be able to easily measure outcomes against their investment goals. Furthermore, the CPI-linked targeted return also contributes to the wider investment focus. This is in contrast to many UK-based fund benchmarks which have a ‘home bias’ within their equity exposure.
As a retail product, the funds will be highly regulated, benefiting from the oversight of multiple third parties, and will also be accessible to advisers on a wide range of fund supermarket platforms. They will not be subject to VAT, or 10% loss reporting requirements. Other tax efficiencies include clients holding a single investment line and CGT liability only on the sale of units in the fund.
Jason Williams, Head of Distribution at Blackfinch Asset Management, said: “The Adaptation Funds enable advisers to offer an ESG-approved outsourced solution which brings the benefits of greater investment scope and regulatory parameters. The new offering allows us to blend active and passive management styles, recognising the strengths of both approaches, as part of meeting client and adviser requirements.”
Richard Cook, Founder and CEO at Blackfinch added: “We believe in addressing our target market with straightforward, clear and transparent investment propositions. The Adaptation Funds are targeted and streamlined in terms of their ratings, structure, reporting and availability. This offering reflects our dual focus on aligning with advisers’ processes and aims alongside clients’ financial objectives.”
